ML12291A508

Response to Request for Additional Information Application for Approval of Indirect Transfer of Control of License of Aerotest Radiography and Research Reactor Pursuant to 10 CFR 50.80 (TAC No. ME8811)

ML12291A508
Person / Time
Site:	Aerotest
Issue date:	10/15/2012
From:	Silberg J Aerotest, Pillsbury, Winthrop, Shaw, Pittman, LLP
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
TAC ME8811
Download: ML12291A508 (18)

Text

Attac ents to this document contain confidential information submittedunder 10 CFR 2.390. This information is Business Confidential to Aerotest andNuclear Labyrinth and is identified with brackets as such [] or in the case ofattachments in their entirety.October 15, 2012ATTENTION: Document Control DeskU.S. Nuclear Regulatory CommissionWhite Flint North11555 Rockville PikeRockville, MD 20852-2738AEROTEST RADIOGRAPHY AND RESEARCH REACTORDOCKET NO. 50-228/LICENSE NO. R-98.RESPONSE TO REQUEST FOR ADDITIONAL INFORMATION RE:APPLICATION FOR APPROVAL OF INDIRECT TRANSFER OFCONTROL OF LICENSE OF AEROTEST RADIOGRAPHY ANDRESEARCH REACTOR PURSUANT TO 10 CFR 50.80 (TAC NO. ME8811)Ladies and Gentlemen:Enclosed please find the response of Aerotest Operations, Inc. ("Aerotest")and Nuclear Labyrinth LLC ("Nuclear Labyrinth") to the U.S. Nuclear RegulatoryCommission's Request for Additional Information Re: Application for Approval ofIndirect Transfer of Control of License of Aerotest Radiography and ResearchReactor Pursuant to 10 CFR 50.80 (TAC No. ME881 1), dated September 14, 2012including supporting affidavits on behalf of both Aerotest and Nuclear Labyrinth.Also enclosed are a request to withhold confidential information from public.disclosure and a copy of the response redacting the confidential information.Should you have any questions or require additional information regardingthis submission, please contact Jay Silberg, counsel to Aerotest at 202-663-8063 orjay.silberg@pillsburylaw.com.Sincerely urs,Ja ilerg Counsel for Aerotest Operations, Inc.Enclosures0 o2-0 October 15, 2012Page 2STATE OF MICHIGANCOUNTY OF OAKLAND: TO WIT:I, Michael S. Anderson, state that I am the Secretary of Aerotest Operations, Inc., and that I amduly authorized to execute and file this response on behalf of Aerotest Operations, Inc. To thebest of my knowledge and belief, the statements contained in this document with respect toAerotest Operations, Inc. are true and correct.Subscribed and sworn before me, a Notary Public in and for the State of Michigan and County ofOakland, this 4t_' day of October 2012.WITNESS my Hand and Notarial Seal:Notary PublicMy Commission Expires:DEBORAH A. COXNotary Public, State of MichiganCounty of MacombMy Commission Expires Ot.13,2017Acting In the County of -J-October 15, 2012Page 3STATE OF UTAHTO WIT:COUNTY OF SALT LAKE COUNTYI, Dr. David Michael Slaughter, state that I am the Chief Executive Officer of Nuclear LabyrinthLLC, and that I am duly authorized to execute and file this response on behalf of NuclearLabyrinth LLC. To the best of my knowledge and belief, the statemnents contained in thisdocument with respect to Nuclear Labyrinth LLC e true and correct.Subscribed and sworn before me, a Notary Public in and for the State of Utah and County of SaltLake, this J4 day of October 2012.WITNESS my Hand and Notarial Seal:My Commission Expires:4 -Date#1OTA1WPUBLM9MWKTR0(P87ON SMISSEPTEMBER V, 2015(9 STATE OF UTAH October 15, 2012Page 4Enclosures1. Response to Request to Request for Additional Information -proprietary copy2. Response to Request to Request for Additional Information -non-proprietarycopy3. Request to Withhold From Public Disclosurecc: U.S. NRC Office of Nuclear Reactor Regulation/NRLPOU.S. NRC Region IV, Regional AdministratorNRC, NRR (Traiforos)NRC, OGC (Uttal)NRC, OGC (Safford)

NUML. TI,3H d=Liei eetaing enfidetntial inifoar-mtion submffitteIda Ino 10 cFr2 39Q Thaiin;foRmation; is; Burines onidnt to A eroatest and Nuclear- Labyr-inth and is identified withbraekets as stuch []cer in the ease of attaehffints idefntified in theircr'.tircty.Aerotest Radiography and Research ReactorDocket No. 50-228Enclosure 2Non-Proprietary CopyOctober 15, 20121. The NRC's regulation under 10 CFR 50.33(0)(2) states that: [T]hheapplicant shall submit information that demonstrates the applicantpossesses or has reasonable assurance of obtaining the funds necessary tocover estimated operation costs for the period of the license.Under Section V, "Financial Qualifications," of the application, theapplicant stated that "[... ]at closing of the transaction [the] seller[Autoliv] will transfer funds sufficient to fund approximately twelvemonths of operating expenses during the restart of the facility and itsresumption of commercial operations." Attachment 6, "Initial YearIncome Estimate for Aerotest Operations," and Attachment 7, "5 YearProjected Income Statement for Aerotest Operations, Inc."' of theapplication indicated that the projected costs of operation for the first yearafter consummation of the transfer are approximately [Based on information provided in the application, clarify this discrepancyregarding the first year of operating costs, and explain how the initialcontribution from Autoliv will fund the operating expenses of Aerotest fora 12-month period.PROPRI[ETARY BUSINESS CONFIDENTIAL TRADE SECRETCcntfidential infortmatiatt submitted tinder 10 C.F.R. § 2.396Withheld fr~rn ptiblie dis3Jvsuie andet 10 C..R. § 2.392. Inspections of fuel have determined that certain fuel elements need to beremoved from service (see NRC Inspection Report No. 50-228/2012-204dated August 14, 2012). Describe the anticipated operating condition ofthe reactor at the time of license transfer. If the reactor will not be fullyoperational (e.g., will be operated at reduced power because of reactivitylimitations due to limited fuel inventory) at the time of license transfer,describe the operational limitations that will be in place.403693846v[

rA ~' 1v.., --,nrrn ', nan 'rxinfo"rmatio'n B n...~e to A roteo+ and Nuc,,leaFr Labyrinth nRd i, idonti+ed .y.,ithbrackets a- Guh [] o; in the cmae of attachments identifed in their ontirety.It is expected that the reactor will be fully operational at the time of closing the transactionand the license transfer. However, it is unknown at this time whether there will be operationallimitations as a result of the fuel elements removed from service. Aerotest is currentlyperforming reviews and analyses of the fuel inventory, which could identify limitations in theability of the facility to achieve its licensed power level. Should such limitation be identified, thetransaction will not close until the facility is fully operational.3. The NRC's regulation under 10 CFR 50.33(f)(2) states: [T]he applicantshall submit information that demonstrates the applicant possesses or hasreasonable assurance of obtaining the funds necessary to cover estimatedoperation costs for the period of the license. In addition, 10 CFR50.33(f)(4) states: [N]ewly-formed entity organized for the primarypurpose of constructing and/or operating a facility must also includeinformation showing: (i) [t]he legal and financial relationships it has orproposes to have to with its stockholders or owners; (ii) [t]hestockholders' or owners financial ability to meet any contractualobligation to the entity which they have incurred or proposed to incur; and(iii) [a]ny other information considered necessary by the Commission toenable it to determine the applicant's financial qualification.Under Section V. "Financial Qualifications," of the application, theapplicant did not identify any sources of funds to cover the projectedoperating costs identified in Projected Income Statement included inAttaclhument 7, pursuant to 10 CFR 50.33(0(2). On July 5, 2012, the NRCstaff requested Aerotest and Nuclear Labyrinth to supplement theapplication to provide the source(s) of funds to cover the projectedoperating costs, specifically to state if there are any committed sources offunds (e.g., commercial, government, or educational) for operations of theARRR facility, and to provide any applicable commitments, letters ofintent, or contracts with these sources. In the July 19, 2012, supplement tothe application, the applicant stated that "Aerotest currently has nocontracts committing individual customers to purchase testingservices. Historically, Aerotest provided services based on customerpurchase orders and did not use long-term contracts. It has not askedany customers for firm commitments, since it is not possible to predictwhen operations at the facility could resume, Acrotest does believe,however, that within the first year after full operations resume, asignificant number of its historic customers will return." In addition,the applicant also stated that Nuclear Labyrinth was created for thepurpose of purchasing the shares of Aerotest, and that as a newly formedentity, it has no financial statements to submit to the NRC.Based on the information provided in the application, provide thefollowing additional information, pursuant to 50.33(f) regarding financialqualification:2403693846vl Nate, This d..um. nt J .t..ins ..fid.ntial infrmttfi.n submitted under 19 0FR 2.390. ThisinfonnAtion ig Busginegrv Confidential to 4perotot and Nuclear Labyrinth and is identified withbrackets as such [I r in Ahe. cwse of attachwents identified intheir Ontirty.a. Describe any actions that have been taken to obtain committedsources of funds for the operation costs of Aerotest. If actionhas not been taken, describe when and by what means Aerotestand Nuclear Labyrinth plan to obtain committed sources offunds.[As stated in our July 19 response, Aerotest 's previous customers have expressed an interest inpurchasing services from Aerotest. However, these customers need assurance that the facilitywill be returned to operation in a time frame that meets their business needs prior to contractingfor such services. Given the current status of the NRC review process, it is not possible topredict with any confidence a schedule when the facility might return to operation'. OnceAerotest is able to develop such a schedule, Aerotest will develop a plan, including a schedule,setting forth the activities necessary to return the facility to operational status. Once this plan isdeveloped, Aerotest will inform customers of the return to service date and solicit commitmentsto purchase services.b. Provide any alternative sources of funds to cover the projectedoperating costs in the event that the historical customers do notreturn and/or Aerotest cannot obtain new customers.As discussed in the response to Question 1, the operating cost projections provided in theApplication at Attachments 6 and 7 include costs associated with providing services tocustomers. The operating costs of the facility will be significantly less if services are not beingprovided to customers. If Aerotest does not provide services to customers, the operating costswill be [ ]per year. Until Aerotest obtains new customers, Aerotest will limit operationof the facility to demonstrating capabilities to potential clients and to performing regulatoryrequired surveillances. In this case, Aerotest will have sufficient finds to maintain the facility inits current status for 12 months.NRC guidance with respect to power reactor licenses provides that where the applicant doesnot have long-term contracts or other committed sources of revenue, the NRC will consider otherrelevant financial information such as whether the applicant has cash to pay fixed operatingcosts during an outage of at least 6 months, the amount of decommissioning funds collected orguaranteed for the plant in relation to the current estimated decommissioning costs, and anyother relevant factors. See NUREG-1577, Standard Review Plan on Power Reactor LicenseeFinancial Qualifications and Decommissioning Funding Assurance at 10. Applying thisguidance to the present case, Aerotest will have sufficient funds to pay operating costs, withoutcustomers, for more than a year upon closing of the transaction. Furthermore, because fundssufficient to cover the currently estimated cost of decommissioning will be transferred at closing,Aerotest will have sufficient funds to cover decommissioning. IfAerotest is unable to obtaincustomers sufficient to offset operational costs and it exhausts its committed operational funds,then Aerotest would commence decommissioning unless it is able to obtain further funds to3403693846vl Note- Thirs 'loc'iMQt con4tains confidential in;fcrma~ion ;111qFitted un~der 10 GFR 2.290. Thisinfortin is Business Cnfidntial to Aeratet and N Tlm and isJ iden tifi eI wibracets~s iic []r i th c'se f atacmens ientfie intheir GA ;-irety.maintain its operational status. Aerotest will provide the NRC with a report indicating thebalance offunds and efforts to retain customers four months after the close of the transactionand every four months thereafter until such time as Aerotest demonstrates that operating costsare being funded by ongoing services.c. Provide information to demonstrate Nuclear Labyrinth's financialability to provide funding for all liabilities regardifig themanagement, storage, removal and disposal of the nuclear fuellocated at the facility, as described in the application. In addition,provide the costs in 2012 dollars associated with the statedliabilities.The cost categories associated with fuel disposition include casks and packaging,transportation, and disposal fees. Aerotest has a contract with the DOE specifying the fee forcask use, transportation, and disposal. The contract provides that the fee will bef Iplus interest. The interest is calculated from October 1, 2010 to the date payment is made basedupon the 13-week Treasury bill rate. The estimated value of the Jee today including interest is[ ]. The fuel canisters for transport of damaged fuel elements are not included in thecontract price and therefore have to be procured separately. Department of Energy (DOE)representatives provided a cost estimate of[ ]for canisters approved for transport ofdamaged fuel elements within the casks using actual costs adjusted to 2012 dollars.[d. Provide a pro forma balance sheet, which recognizesdecommissioning costs as a liability, for Nuclear Labyrinth.Nuclear Labyrinth's pro forma balance sheet is provided as Attachment 1.e. Inspections of fuel have determined that certain fuel elements needto be removed from service (see NRC Inspection Report No. 50-228/2012-204 dated August 14, 2012). State whether the projectedoperating costs include the costs associated with damaged fuel,such as the technical analysis, replacement, and/or repairs, etc.,before the reactor can be returned to operation. If the projectedoperating costs do not include these costs, provide information onhow these costs will be covered (e.g., the reactor be returned to anoperating state before the license transfer).The projected operating costs do not include costs associated with damaged fuel. Activitiesassociated with the damaged fuel are expected to be completed prior to closing the transactionand the license transfer and will therefore be paid by the current licensee.4403693846v I N48481 This docuMPAmsentcntains contfi4dentAlW infrm&PAtionA subitt d~A undrQ1 CF9R 2.39. Thisinformnatin ip Rur4inecR Con;fidential to Aorectest and Nuelear Labyrinth amd is identified withbr-aekets as stuch [] or int the ease of attaelhmentg identificd in their crntirety.f. If reactor operation is limited at the time of license transfer (e.g.,reactor will need to operate at reduced power because of limitedfuel inventory), describe how the potential limitations will affectthe projected revenue as provided in Attachment 7 of theapplication. In addition, update Attachments 6, 7, and 9 to reflectthe potential impact of the operation limitation on cost andrevenue.As described in the response to question 2, it is anticipated that the reactor will be fullyoperational at the time of closing the transaction and license transfer. Thus, there will be nolimitations impacting the projected revenue provided in the application.4. The NRC's regulation under 10 CFR 50.75(d)(1) states: Each non-powerreactor applicant for or holder of an operating license for a production orutilization facility shall submit a decommissioning report as required by §50.33(k)...Pursuant to 10 CFR 50.75(d)(2), the decommissioning report must: (i)contain a cost estimate for decommissioning the facility; (ii) indicatewhich method or methods described in paragraph (e) [... ] as acceptable tothe NRC will be used to provide funds for decommissioning; and (iii)Provide a description of the means of adjusting the cost estimate andassociated funding level periodically over the life of the facility.Under Section VI, "Decommissioning Funding," of the application, theapplicant provided a decommissioning cost estimate prepared byEnergySolutions. The applicant stated that: (1) decommissioning fundingassurance would be held in a decommissioning trust, with Autoliv toprovide the initial decommissioning trust fund contribution of $3,285,800;(2) future funding will be provided by Aerotest per the schedule includedin Attachment 9; (3) for the purposes of projecting future costs, theschedule included in Attachment 9 uses a cost escalation factor of 3percent; and (4) the future funds will be from decommissioning feescharged to users of the ARRR for the first five years of operation underthe new ownership.Based on the information provided in the application, provide thefollowing additional information, pursuant to 50.75(d) regarding financialassurance:a. Update the decommissioning cost estimate to current 2012 dollars.The updated decommissioning cost estimate is [ ] in terms of 2012 dollars.b. Provide the basis for the cost escalation factor of 3 percent (e.g.,independent study, consumer price index long-term historical dataetc.)5403693846v]

?brnckatg as sucsh [] 9r in the ease cfatteehffents identified in their entirety.The cost escalation factor of 3 percent is a conservative estimate based on historical inflationdata. See http://inflationdata.comn/Inflation/Inflation Rate/HistoricalInflation.aspx. NRCguidance in Regulatory Guide 1.159 suggest that estimates for inflation should be based onrecent economic performance, i.e., within the past 10 years. The inflation rate for the ten yearsfrom 2002 to 2011 is 2.43 percent. Thus, the use of 3% is a conservative estimate based on thisdata.c. Provide a revised method or methods that will be used to providefunds for decommissioning since future funds from customers isnot credited for decommissioning financial assurance unless thelicensee meets the requirements of 10 CFR 50.75(e)(1)(ii)(A) or(B), or (e)(1)(v).The financial assurance method to be used for decommissioning funds is a prepaid trust to befully funded with an amount equal to the decommissioning cost estimate. As provided in theapplication, Autoliv will transfer funds in an amount equal to the decommissioning cost estimateto the Aerotest decommissioning trust fund In 2012 dollars, this amount is equal to[ ]. In addition, Nuclear Labyrinth will maintain a [ J line of credit from aFederally Insured Bank to be used in the event that future updates to the cost estimate or fundperformance reveal a shortfall in the firnd balance.5. The NRC's regulation under 10 CFR 50.75(e)(1) states: A licensee thathas prepaid funds on a site-specific estimate [ ... ] may take credit forprojected earnings on the prepaid decommissioning trust funds, using upto a 2 percent annual real rate of return from the time of future funds'collection through the projected decommissioning period, provided thatthe site-specific estimate is based on a period of safe storage that isspecifically described in the estimate.The NRC's regulation under 10 CFR 50.75(f)(5) states: If necessary, thecost estimate, for power and non-power reactors, shall also include plansfor adjusting levels of funds assured for decommissioning to demonstratethat a reasonable level of assurance will be available when needed to coverthe cost of decommissioning.Under Section VI, "Decommissioning Funding," of the application, theapplicant stated that the projection for decommissioning financialassurance uses a real rate of return of 1.96 percent based on an imputedtax affected rate of return on 30 year t-bills, on average, since 2001. Inaddition, the applicant stated that the required decommissioning fundinglevel will be adjusted on a bi-annual basis based on updateddecommissioning cost estimates to be prepared by outside experts, afterthe first five years of operation. Attachment 9, "DecommissioningFinancial Assurance Projection," shows funds and decommissioning costprojection for the first nine years of operation.6403693846vi Note: Thig documen6At conAtain. confidential in;formAtionR Rubmistted under. 10 CFIR 2. 390. Thisinformation is Businoss Confidential to Aer-efest and Nuelear Inabyirinth and is identified withbrcecas such [i @F i-n the ease ef atteehmcrnts idcrnstified in their entirety.Based on the information provided in the application, provide thefollowing additional information, pursuant to 10 CFR 50.75(d) regardingdecommissioning funding assurance:a. Clarify if the amounts shown in Attachment 9, "DecommissioningFinancial Assurance Projection," are in current dollars or futuredollars. The NRC Staff noted that Attachment 9 includes a costescalation of 3 percent on the decommissioning cost and a real rateof return of 1.96 percent on the Autoliv contribution.The decommissioning cost estimate, which is the [ ] Autoliv contribution, is in 2011dollars.b. Provide a summary schedule of annual expenses to include safestorage cost, projected earnings, and end-of-year fund balances,expressed in 2012 dollars, in order to take earning credit.Otherwise, update Attachment 9 to exclude the real rate of return.The decommissioning cost estimate off ] is in 2012 dollars and is sufficient to covercosts for immediate decommissioning. This estimate does not include safe storage. Aerotestrequests that Attachment 9 be removed from the application.c. Clarify how often the decommissioning cost estimate will beprepared by outside experts after the first five years of operation.Following the first five years of operation, the decommissioning cost estimate will be updatedevery two years by a qualified independent firm.d. Describe how Nuclear Labyrinth will monitor and ensuredecommissioning funding levels during the year(s) where adecommissioning cost estimate is not being assessed by outsideexperts.A review of the decommissioning account will be completed on an annual basis. The AerotestBoard and management team will compare the balance of the decommissioning account to the2012 decommissioning cost estimate and adjust the trust balance as necessary.e. Describe how decommissioning financial assurance levels will beadjusted to account for higher than planned cost escalation rates orlower than planned real rates of return.As described above, the decommissioning account will be reviewed on an annual basis by theBoard and management team. Based on this review, any recommended funding adjustments willbe implemented within 30 days of approval.f. State any actions Nuclear Labyrinth will take to cover shortfalls inthe decommissioning trust fund and how quickly they will becovered.7403693846v I Note: This documenAt containS 0ecnfidefntial infcrmfitien submitted uinder 10 CFR 2.396. Tlhiis BHuiness Conridential t, Aerotest And Nuclear Labyrinth ,Ad is idPntifid withbhrackets aS such []o is th40ecase ofattachments identified in their efntirety.To the extent that the Board and management team determine that additional funding isnecessary, Nuclear Labyrinth will adjust the fund balance using on hand assets or draw on thestandby line of credit from a Federally Insured Bank. As provided above, any adjustments willbe made within 30 days of approval.6. The NRC's regulation under 10 CFR 50.33(0(5) states: The Commissionmay request an established entity or newly-obrmed entity to submitadditional or more detailed information respecting its financialarrangements and status of funds if the Commission considers thisinfonrmation appropriate.Under Section III, "General Corporate Information Regarding AerotestOperations, Inc. and Nuclear Labyrinth, LLC," of the application, theapplicant stated that "Nuclear Labyrinth is a business that evolved from E-Cubed Inc. (E3) established in 1989 in the State of Utah. In addition theapplicant stated that "[i]n approximately 2002, the State of Utah awardedDr. Slaughter funds for a Center of Excellence, which, among otherthings, was to identify nuclear, based spinoff. This effort was the impetusfor changing the company name to Nuclear Labyrinth." In the July 19,2012, supplement to the application, the applicant stated that NuclearLabyrinth was created to purchase the shares of Aerotest and that it is anewly formed entity.Based on the information provided in the application, provide thefollowing additional information, pursuant to 10 CFR 50.33(f)(5)regarding financial qualifications:a. Clarify when Nuclear Labyrinth was formed and its relationshipwith E3.Nuclear Labyrinth was formed as an unincorporated business entity in 2007. It was organizedin Utah as a limited liability company (LLC) in 2012. There is no corporate relationshipbetween Nuclear Labyrinth LLC and E-Cubedb. Explain any funding sources from E3 that will assist NRC staff toreview the financial qualification of Nuclear Labyrinth.There are no current funding sources for E3.7. The NRC's regulation under 10 CFR 50.80(b)(2) states: The applicationshall include [... ] the nature of the transaction necessitating or makingdesirable the transfer of the license.Under Section 1. "Introduction," of the application, the applicant statedthat "Aerotest Operations, Inc. the owner of the ARRR, is a wholly ownedsubsidiary of OEA Aerospace, Inc., a wholly owned subsidiary of OEA,Inc., which is a wholly-owned subsidiary of Autoliv "ASP, Inc.(collectively, "seller")." The Funding Agreement included within the July8403693846v I Note: ThiR documenQt eon~tains c9Ronfitial informaation submitted under 10 CFR 2.390, +hisinrforntignn is Confldential to -4;;d NucleA L.abyrtinth and i: identified withbrackets as such []or i n the Gase of attaacmntz identified in their- efnir-efy.19, 2012 supplement to the application, stated that Autoliv ASP, Inc. anIndiana corporation or its designated affiliate, is the Seller.Please provide the details on the proposed transaction, include the type oftransaction (merger, acquisition, transfer of stocks, etc), the actual currentowner of Aerotest stock, and the actual seller of the Aerotest stock..The transaction is anticipated to be a sale of all of the issued and outstanding shares of stockofAerotest Operations, Inc. to Nuclear Labyrinth, LLC. All of the issued and outstanding sharesof stock ofAerotest Operations, Inc. are owned by OEA Aerospace, Inc. OEA Aerospace, Inc.would be the actual seller of the stock ofAerotest Operations, Inc.Attachments:1. Nuclear Labyrinth Pro Forma Balance Sheet9403693846v0 ATTACHMENT (1)PROPRIETARY -BUSINESS CONFIDENTIAL TRADE SECRETConfidential information submitted under 10 C.F.R. § 2.390Withhold from public disclosure under 10 C.F.R. § 2.390Nuclear Labyrinth Pro Forma Balance Sheet403693846v]

Enclosure

3License No. R-98October 15, 2012Document Control DeskU.S. Nuclear Regulatory Commission11555 Rockville PikeRockville, MD 20852-2738Aerotest Radiography and Research ReactorDocket No. 50-228Request for Withholding of Proprietary Information related to AerotestRadiography and Research ReactorLadies and Gentlemen:Pursuant to 10 CFR 2.390. Public Exemptions, Request for Withholding, AerotestOperations, Inc. (Aerotest) and Nuclear Labyrinth LLC (Nuclear Labyrinth) herebyrequest that certain information contained in their Response to Request for AdditionalInformation Re: Application for Approval of Indirect Transfer of Control of License ofAerotest Radiography and Research Reactor Pursuant to 10 CFR 50.80 (the"Response") be withheld from public disclosure as such information contains tradesecrets, commercial information, and financial information which is BusinessProprietary.In support of our request we state the following:1. The information sought to be withheld from public disclosure are sections of theResponse to Request for Additional Information Re: Application for Approval ofIndirect Transfer of Control of License of Aerotest Radiography and ResearchReactor Pursuant to 10 CFR 50.80 dated October 15, 2012 submitted byAerotest Operations Inc. and Nuclear Labyrinth marked as Business Confidentialincluding Attachment (1).2. The persons making this request are Michael S. Anderson of Aerotest and Dr.David M. Slaughter of Nuclear Labyrinth.3. The basis for proposing that the information be withheld from public disclosure isthat the information marked as Business Confidential contained in the Responseis confidential business and financial information of Aerotest and NuclearLabyrinth, which information has been held in confidence by Aerotest andNuclear Labyrinth, is a type customarily held in confidence, is not available inpublic sources, and if publicly disclosed would be likely to cause substantial harm PROPRIETARY -TRADE SECRETConfidential information submitted under 10 C.F.R. § 2.390.Withhold from public disclosure under 10 C.F.R. § 2.390to the competitive position of Aerotest and Nuclear Labyrinth taking into accountthe value of the information, the amount of effort and money expended byAerotest and Nuclear Labyrinth in developing the information and the difficultlywith which the information could be acquired or duplicated by others;4. If such information were disclosed to the public, Aerotest and Nuclear Labyrinthbelieve that competitive harm would result;5. The Response has been marked to show locations of the information sought tobe withheld.2 PROPRIETARY -TRADE SECRETConfidential information submitted under 10 C.F.R. § 2.390.Withhold from public disclosure under 10 C.F.R. § 2.390Michael S. Anderson, being dully sworn, states that he is Secretary of Aerotest, that heis authorized on the part of said Company to sign and file with the U. S. NuclearRegulatory Commission this request for the Aerotest Radiography and ResearchReactor, and that all the matter and facts set forth herein are true and correct to the bestof his knowledge.Michael S. AndersonSecretarySubscribed and sworn to before me, a Notary Public, in and for the State of Michiganand County of Oakland, this /14h day of October 2012.NotW nadfor the Stateof MichiganDEBORAH A. COXMy Commission Expires: _ Notary Public, State of MichiganCounty of MacombMy Commission Expires Oct. 13,2017Acting In the Couly of glsk 1 3L2L3 PROPRIETARY -TRADE SECRETConfidential information submitted under 10 C.F.R. § 2.390.Withhold from public disclosure under 10 C.F.R. § 2.390David M. Slaughter, PhD, being dully sworn, states that he is Chief Executive Officer ofNuclear Labyrinth, that he is authorized on the part of said Company to sign and filewith the U. S. Nuclear Regulatory Commission this request for Nuclear Labyrinth, andthat all the matter and facts set forth herein are true and correct to the best of hisknowledge.Davi .Slaughter, PhDChief Executive OfficerSubscribed and sworn to before me, a Notary Public, in and for the State of Utah andCounty of Salt Lake, this L day of October 2012.o0 nan r eState of UtahMy Commission Expires: 0'lZ- 7 //SNOTARY PIJBUORDWY PATRICK640787COMMISSION EXMSEPTEMBER 27,2015(9 STATE OF UTAH4